George Frangeskides, Exec-Chair at Alba Mineral Resources, discusses grades at the Clogau Gold Mine. Watch the full video here.
Taking lower end production from 2024 guidance (345,000 - 365,000 oz) and higher end costs from expected AISC ($1,300 -1,400/oz) with a gold price of $2,200 going forward RSG are making $75m gross each quarter. Would not be surprised if they end the year with gold bullion / cash on the balance sheet equivalent to half their current market cap.
A full years worth of gold sales (105,000 ounces) from today at the current $2,200 gold price brings in roughly $230 million revenue and gross profits of $90 million.
The proposed 14.85p takeover price values the company's ongoing operations at $196m (£156m).
Assuming every fund invested is out for themselves and not acting on behalf of the board, the bid has to fail and the share price rerate higher.
Bonker - You're choosing to respond and be defensive when your posting history reads like a schizophrenic patients diary, flipping between trades. No issue people trading but pouring out misleading statements is pretty low. If you were mistaken just take it on the chin rather than mention one of your crystal ball predictions from months past.
Bonker99 - the disingenuous fear mongering being spread is nothing new among the online boards, always happens when there are opportunities to capitalise on this uncertainty. There's more than enough volatility going round for traders like yourself without resorting to false and / or misleading statements.
Just to confirm gold IS coming out of the ground still and the likelihood of the current rate increasing in the year ahead is high given the initial statement indicated Hummingbird would exercise it's right to employ "alternative mining contractors and equipment suppliers to achieve full mining operations".
"Hummingbird is working to reach full mining capacity, while continuing to process both low-grade stockpiles and ore being mined separately by a supporting mining contractor which was appointed in H2-2023 to support Corica's mining activities. The supporting mining contractor has one fleet on site to support the contracted four fleets from Corica.
The processing plant is expected to continue to run in the near term, however until increased mining capacity is available, reaching commercial production will not be possible, with production and cash flows increasingly impacted.
Notice has been given to Corica to return to work by Tuesday 19 March 2024, failing which the Company will exercise its rights which could include, stepping in to resume mining, and working with alternative mining contractors and equipment suppliers to achieve full mining operations."
Huge profits following ramp up of production to 123,000 boed average in 2023.
Forecast 155,000 to 175,000 boed in 2024!
2023 revenues climbed 93% to $1.4bn. Underlying adjusted earnings jumped 121% to $931m. Operating profits surged 158% to $598m.
"Since the year end, the start-up of Karish North and the second gas export riser mean we are now able to utilise the FPSO’s (floating production storage and offloading) maximum gas capacity and our production guidance illustrates the next step towards our near-term target of 200 kboed."
There are posters here looking to force the price down for a better buy in or it appears posting out of spite.
Let's speculate then Hummingbird continue to have the support of Coris bank and given the nature of this problem being poor contractor performance and breach of contract, Coris may be willing to extend timelines and/or rearranging financing under new terms to get production back up in the short term, spreading repayments into 2027 and beyond.
Yanfolila is expected to produce 75 - 85koz at $1,500/oz generating net c.$25m at current margins.
Net cash /gold available at 31 Dec 23 was $13.9m while available funds net of fees following raise are approxc.$26m
And speculating on Kouroussa, reduced quarterly output of 15koz is a reasonable assumption with production already weighted towards the second half of the year. I'll assume it's weighting is even heavier now as Hummingbird would need to employ a secondary support mining contractor in addition to the current one and/or provide the means (likely capital) to improve efficiency. In such a scenario I don't think it's unreasonable to suggest Kouroussa covers it's mining costs (when spread over the year).
If Corica intend to come to a resolution and resume mining then the picture improves. If Coris extend the loan repayments or reduce the 2024 schedule specifically or provide additional financial support the picture improves.
Gold futures above $2,200+ this morning!
Shanta Gold must be worth at least 24p (£250 million) on forward earnings and Q1 results just around the corner. Will our institutional investor friends do that right thing and act in their best interest. Not in the interest of Bidco.
Could well be a disputed amount owing to Corica not meeting contract under terms of agreement.
Should have been the initial opening offer months ago but feels better seeing an a dividend inclusive 15p offer on the table. Would be silly to accept it of course. Good fun watching the board squirm and bow to shareholder pressure, long may that continue! Huuaaaa!
Bismarck - indeed there were no large sells, the MMs simply dropped the price moments after the RNS landed and it continued falling throughout the day. Not many buyers despite the ask at 8p as the company left too much unspoken in regards to financial position. Assuming Coris are sympathetic and supportive of extending repayment dates it will ease concerns over Hummingbird's debt requirements.
Money on the side-lines isn't coming back until those concerns are addressed first and foremost regardless of what happens to our contractor
Would be interested to know the details of the mining dispute. Could turn out to be a non event if resolved later this week. Alternatively if Hummingbird go out to tender a new contractor (or ideally multiple to reduce future risk of this happening again) it will impact production over a number of weeks and possibly months.
It could be worth checking if your share holding increased / decreased since placing the initial first vote. I sold some of my shares in one account at the beginning of the week and noticed the vote allocation needed updating.
The Dividend policy is to pay out all income each year rather than setting some aside so assuming recent commodity price gains continue this will inevitably lead to a higher dividend than the 33.5p paid out last year.
At the end of January the main sector weighting was the 37.7% allocation to diversified miners, followed by copper 22.6% and gold 13.4%. Gold and copper have gone on runs recently, the latter still appears to be in the middle of a correction and the gains will only begin to carry over once producers have booked a full quarter of sales.
BRWM management has a knack for picking those with the strongest margins and in upturns like we are in now should reap decent rewards.
Note last year interest paid on loans was $28.9 million (2022: $15.3 million) due to rising interest rates however the overall debt on the balance sheet has increased too. Factoring in the continued rate rise through the period, the reduction in liquid cash and reliance on fully drawn-down loans I'd imagine interest this year will be considerably higher once more.
Regardless of whether margins improve this year the company is highly geared in a high rate environment with extensive capital costs outstanding. Not one I'd buy over other more attractive producers at this level
Financials
- Headline revenues of $525 million and adjusted EBITDA of $190 million for 2023.
- That's a 34% increase in annual revenue, thanks to a combination of improved copper production and Taseko's bold move to increase their interest in the Gibraltar Mine during the year from 75% to 87.5%.
- Net income for the year was $83 million ($0.29 per share)
- Operating cashflow was an impressive $63 million in Q4 alone!
Operations
- Copper production (Gibraltar) was 34 million pounds in Q4 and 123 million pounds in the FY 2023.
- Irrespective of company holdings in the project that's an impressive 26% increase on 2022, annual production came in over and above guidance.
- Cash costs were lower at just $1.91 per pound in Q4 and averaging $2.37 per pound for the year.
Florence Copper project
- The EPA's permitting process concluded in Q4 with the final Underground Injection Control permit finanlised.
- Florence project financing already secured (Taurus Mining Royalty Fund, Societe Generale, Mitsui and Bank of America).
- Construction of the commercial production facility underway with first copper production expected Q4 2025.
- Florence Copper Project has a NPV of $930 million (after-tax, 8% DR) with an IRR of 47% (after-tax) and expected payback period of 2.6 years based on annual production of 85 million pounds copper. Current mine life of 22 years.
Outlook 2024
- Gibraltar Mine to continue with Gibraltar pit ore as main source of mill feed for H1 2024, transitioning to the Connector pit later this year.
- Gibraltar guidance of 115 million pounds of copper production.
- SX/EW facility to come back online in 2026.
- Capital costs of only $10 million planned for Gibraltar in 2024.
Given the translation here last year of a high gold price = increased net asset value + increased company profits the 5% gain in the gold price this past week will at some point be reflected in the market value (30% off it's peak).
As ever, very much appreciate the updates rivaldo. Tend to take no notice of broker target prices although do track upgrades/downgrades and their forecasts really are useful when it comes to highlighting new events / unexpected changes which may otherwise go under the radar (at least my radar!)
Perhaps, given the revival of the commodity sector this week, the latest forecast is already out of date.
In fact the market value has already risen by c. £25m in the past 24 hours. Gains not limited here either, sector beginning to pick up
42trader it's only another 20% from here, Resolute is capped at approx £425m
While not ideal Serica can comfortably manage the extended WF tax with production costs less than $20/boe, the price of oil building over recent weeks and set to move higher as commodities benefit from a weaker dollar in the second half of the year. Not to mention almost £300 million in liquid assets!